Western North Carolina Mountain Real Estate and Landslide Insurance

Question: Does your homeowners insurance policy cover landslides? The answer is no. For a professional assessment of landslide risks please read
"Western North Carolina Landslides are an Expensive Reality."

In 2005, the North Carolina Rate Bureau approved new language to clarify the confusion over natural versus man-made landslides. North Carolina homeowner policies now specify that any earth movement “caused by or resulting from human or animal forces or any act of nature” is not covered. Please see the following letters.


Edward B. Rust Jr., CEO
State Farm Insurance
1 State Farm Plaza
Bloomington, Illinois 61710

Dear Mr. Rust:

I hope that my letter and the enclosed information will persuade State Farm to advise their home insurance policyholders in Western North Carolina of the risks of buying mountain slope property.

Most people think of California when you mention landslides. They don’t associate these disasters with Western North Carolina. In September 2004, 130 landslides caused 5 deaths and destroyed 27 homes in these mountains.

In February 2005 the North Carolina General Assembly passed the Hurricane Recovery Act. Part of the bill provided funding for the North Carolina Geological Survey to begin a landslide hazard map for nineteen counties. The state has recognized the risk of slope development and the North Carolina geological staff has published extensive reports warning about the dangers of unregulated mountain development.

Currently there is little or no state supervision of mountain development. Safety ordinances and guidelines are left to local municipalities. Most local governments are not requiring geologic hazard mapping as a requirement for building permits. This lack of safety protocol poses serious personal and financial risks.

Buyers of mountain property should ask the developer for a copy of the hazard report certifying that their home is constructed on stable ground. Owners and buyers of mountain property should be advised that homeowner policies will not cover damage caused by earth movement and ground water flooding.

According to Marc Pruett, Haywood County soil and erosion control officer, “anyone with a bulldozer and backhoe can carve out homesites and roads into the mountainside. This lack of engineering is causing homes and roads to slide down the mountain throughout the county.” Mr. Pruett’s description of the effects of on going mountain slope development is true for much of Western North Carolina.

Thank you for your interest in this serious matter.

Sincerely,

Lynne Vogel
_________________


State Farm Insurance Companies reply June 21, 2006.

Re: Your letter of May 17, 2006 to State Farm Ed Rust, Jr.

Dear Ms. Vogel:

I am a member of State Farm's corporate property & casualty insurance underwriting staff. Mr. Rust has asked me to review your letter and the information you sent with it. I commend you for your proactive work to bring a serious issue to the parties in your area and in North Carolina state government. I see among the items you sent Mr. Rust the letter from state geologist James Simons detailing the landslide mapping program now underway in western North Carolina.

State Farm is committed to doing everything we can to help the public understand hazardous conditions, the sources of damage to property, and what can be done to prevent it. In fact, we have a staff dedicated to helping people understand and know what to do to prevent damage, and I am going to share the information you provided with them. It will be helpful as we make decisions on those issues most critically needing public education and how to best allocate our resources to accomplish that education.

I encourage you to continue your efforts to bring the serious consequences of inadequate land use policy to the attention of your local and state government officials and legislators. While State Farm is committed to public education on causes of damage, your government officials are in the best position to shape land use policy to minimize the loss of life and damage to property you have highlighted.

Sincerely,

John Shearin
Consultant, Property and Casualty Underwriting
State Farm Fire & Casualty Company